WorldSpreads plunges into administration

 
City A.M. Reporter
Financial spread-betting company WorldSpreads Group, which suspended its shares last week over possible irregularities in its accounts, has gone into administration and warned it owes clients millions of pounds.

The Dublin-based company, which runs online and telephone trading services, said on Monday Jane Moriarty and Samantha Bewick from accountancy firm KPMG had been appointed as joint special administrators.

Moriarty said job cuts were likely. The company employs around 66 people.

"Our aim is to close down the business, collect the cash and give it back to customers. There won't be a prospect of a sale of the business because the problems have come up so quickly and there will be some redundancies," Moriarty said.

WorldSpreads said its directors believed that, as of the close of business on 16 March, there was a shortfall of around £13m of client money.

It added that gross amounts owed to clients were estimated at around £29.7m, while the company had total cash balances of around £16.6m.

Conor Foley, who is also WorldSpreads' largest shareholder, stepped down as the company's chief executive last Wednesday, two weeks after Chief financial officer Niall O'Kelly submitted his resignation on the day the group issued a profit warning.

WorldSpreads said it had identified financial irregularities following a company review and warned last month it would report a loss for the year ending 31 March.